A Mouse With His Head In The Clouds – Can Cloud Computing Help the Studios Help Themselves

I woke up a couple of weeks ago to earth-shattering news. Everything I thought, knew, endorsed about the pace of change in Media & Entertainment was being rattled. Yes, the studios were becoming agents of digital change. After being dragged, kicking and screaming for the past decade, the studio heads themselves were doing more than acknowledging the need to embrace “multi-platform” delivery. Incredibly, they were looking to pioneer it.

Don’t tell my friends at Home Entertainment divisions across this fair city, but the DVD business is something of a downer. Sure, the discs will be around for years to come, but, hey, my mother still buys music cassettes, and that doesn’t make it a viable business model.

After what seemed like years of internal industry rumblings about “cyber-lockers” and “Keychests,” Disney announced plans to launch their own Keychest initiative by Q3 of 2010. Even more shocking, they acknowledged the decision would not make them any money—repeat: not make money—for at least 5 years. And, they were determined to move on this face of this.

I’ve blogged about the Keychest concept before. A “keychest” allows a consumer of …

I woke up a couple of weeks ago to earth-shattering news. Everything I thought, knew, endorsed about the pace of change in Media & Entertainment was being rattled. Yes, the studios were becoming agents of digital change. After being dragged, kicking and screaming for the past decade, the studio heads themselves were doing more than acknowledging the need to embrace “multi-platform” delivery. Incredibly, they were looking to pioneer it.

Don’t tell my friends at Home Entertainment divisions across this fair city, but the DVD business is something of a downer. Sure, the discs will be around for years to come, but, hey, my mother still buys music cassettes, and that doesn’t make it a viable business model.

After what seemed like years of internal industry rumblings about “cyber-lockers” and “Keychests,” Disney announced plans to launch their own Keychest initiative by Q3 of 2010. Even more shocking, they acknowledged the decision would not make them any money—repeat: not make money—for at least 5 years. And, they were determined to move on this face of this.

I’ve blogged about the Keychest concept before. A “keychest” allows a consumer of content—you—to buy a license to consume (read: watch) a piece of content across multiple channels for a single price. So, you get your file download, mobile and VOD versions for a single unit cost. It’s revolutionary, and what customers are demanding.

As one of my favorite past- bosses—and one of the industry’s most respected thinkers—likes to say, “The Devil is in the Details.” While the Keychest model needs to evolve, the technical, business and philosophical hurdles are significant. But, we’ve come a long way already.

I’ve been at the “digital content” thing a long time. My first venture in the space began in 1998, when the world connected to the internet via 56K dial-up modems, if anything at all. My little company’s vision: to deliver original and syndicated children’s content online, monetized through e-commerce-based sales of licensed merchandise. Sounds like a semi-viable business idea today. We were a bit, um, early then. Thank goodness, this was the height of the dot-com boom, and little else mattered, except that we had cool office space South-of-Market, and used saw-horses for desks. We were early, too, on more than just the technology front—at that time, major studios and content owners didn’t think/care/believe that the distribution of content online would entice consumers.

More recently, in my last life prior to joining Teradata, I oversaw digital media content management and distribution for a major company, servicing almost all of the major studios (from onesies/twosies encodes to petabytes of data in the form of thousands titles under digital storage) looking to engage in the brave new media world. I joined that company seven years ago and we were still early. Over time, infrastructure massively improved, encoding and transcoding technologies evolved, storage became cheap-ish, and Steve Jobs hopped in the picture. Still, I remember not too long ago trying to explain to Studio execs why they should consider delivery to mobile.

Waning businesses can make funny things happen. Here we are now, and another perfect storm is forcing the industry to shift, despite its conservative leanings. Plummeting DVD sales, entitled consumers (like me), open-minded leadership and broad adoption of a not-so-new technology concepts are the catalysts.

What’s the not-so-new concept marvel? The Cloud. Technologists around the globe are enamored with the idea of a nebulous, universally accessible content and data store. Widespread adoption of and comfort with notions of cloud computing, for everything from storage to application processing, is making frightening change more palatable and achievable for many industries. Company’s with predominant on-site data and/or storage business models—like Teradata, even—are delivering cloud-based offers and services. And, for lots of companies—or, more accurately, for specific business within those companies—a cloud-based model makes sense.

Whatever is driving the change, it’s about time for the Studios start leading the charge. Fulfilling the Keychest’s promise is more than any single entity can do alone. A network of partners—from content owners, preparers, packagers, delivery networks, security services—will need to engage as a finely tuned machine. I admire the Mouse for taking this on. Disney’s always been a purveyor of fantasy. Here’s to the Keychest as a revolutionary reality!